May 20, 2014

Billions in pensions and municipal funds at risk

Pension funds, municipalities and banks urged to ditch high-carbon investments

The Hague, Netherlands/ London, UK — As Royal Dutch Shell holds its annual general meeting today, campaign groups warn that capital invested in the oil company is at risk of going to waste. Fossil Free Europe highlights that retirement money, municipal funds and citizens’ savings are at stake.

A series of recent studies underpin this warning. A new report launched today by Friends of the Earth titled “Shell’s carbon bubble” shows that capital invested in the oil company is at risk of seeing no return on investment [1]. Another recent report by London-based think tank Carbon Tracker Initiative found that fossil fuel companies bet more than $ 1 trillion on high-risk oil projects over the next decade. It warned investors of the high demand and price assumptions that these spendings are based on, which risks investors’ capital being wasted. The report identified Royal Dutch Shell as one of the top three oil companies with the highest risk [2]. European Divestment Coordinator Tim Ratcliffe said, “Shell, Exxon and the like have been very upfront about their plans to gamble shareholders’ money on high-risk fossil fuel projects and climate catastrophe. Pension funds, municipalities and public banks have no business wasting our money on reckless oil, coal and gas projects.”

Investors arriving at the Shell annual general meeting in the Hague and London were greeted with messages about Shell’s carbon bubble by campaigners of and Friends of the Earth. In Sweden and the Netherlands, Fossil Free campaigners warned that billions in retirement money are at risk. Dutch pension fund ABP has € 962 million invested in Shell and € 10 billion in fossil fuels overall [3]. The Swedish national pension funds (AP funds) have investments of SEK 1,163 million in Shell and a total of SEK 32 billion in fossil fuels [4]. In Germany, campaigners highlighted the high financial risk municipalities and private customers of the public banks (Sparkassen) are exposed to because of its investments in high-carbon assets via its central asset manager DekaBank. DekaBank has € 188 million invested in Shell and € 900 million in fossil fuels. Fossil Free Germany placed carbon bubbles in front of the Sparkassen branch at Berlin’s iconic Alexanderplatz.

In a letter to investors from May 16, Shell affirmed that it has no intention of addressing the risks of its carbon bubble and will continue to burn through its reserves betting on high demand and price [5]. Shell itself has warned earlier this year that its profitability will be hit as governments step up efforts to reduce greenhouse gas emissions [6], after it had previously reported a 48% decline in expected earnings [7].


Contact: Melanie Mattauch, European Communications Coordinator,, +49 151 5812 0184

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[1] Friends of the Earth: Shell’s carbon bubble

[2] Carbon Tracker: Evaluating financial risk to oil capital expenditures

[3] The Greens/ EFA Group: Carbon bubble: The price of doing too little, too late

[4] WWF report: Swedish pension funds investments in fossil fuels

[5] Shell letter to investors, 16 May 2014

[6] Shell annual and strategic report 2013

[7] Bloomberg: “Shell profit drops 48% as oil and gas production declines